Focus Research Institute · Monthly Financing Report
Date of production: February 8, 2023
Key points of this month:
Financing scale: Financing in the first month decreased by 36% year on year, and the decision makers emphasized improving the assets and liabilities of real estate enterprises
Real estate enterprises: The list of private enterprises issuing bonds expanded again, and the issuance of overseas bonds increased sharply
Debt pressure: 3、 April and February ushered in the peak of debt repayment, and real estate enterprises still have three hidden worries about debt repayment
1、 Financing scale: financing in the first month decreased by 36% year on year, and the decision makers emphasized improving the assets and liabilities of real estate enterprises
In the middle of January, the Central Bank and the China Banking and Insurance Regulatory Commission held a symposium on bank credit work, emphasizing to keep real estate financing stable and orderly, and implement the plan to improve the balance sheet of high-quality real estate enterprises. Since then, many departments have also emphasized the need to carry out four actions, namely, "asset activation", "debt continuation", "equity supplement" and "expected improvement", to promote the normal circulation of finance and real estate, and to implement the "16 Rules of Finance". The list of real estate enterprises involved in the plan to improve the balance sheet of high-quality real estate enterprises includes: Longhu, Jindi, Country Garden, Xincheng Holdings, Midea Real Estate, Sino Ocean, Binjiang, etc.
From the perspective of financing scale, in January 2023, real estate enterprises raised about 87.81 billion yuan, up on the same month on month basis, but including 4.96 billion dollars of overseas bonds that Huaxia Happiness completed the restructuring and delivery. If this debt restructuring is not considered, the actual financing in January 2023 will be about 53.02 billion yuan, down 18.2% month on month and 36.5% year on year.
Part of the reason for the "double drop" in actual financing compared with the previous month is that the Spring Festival holiday has reduced the number of actual working days, which has affected the financing of real estate enterprises. On the whole, since the fourth quarter of 2022, the financing policy for high-quality real estate enterprises has been accelerated, the enterprise financing end has "launched three arrows", and some real estate enterprises have opened their financing gates.
In terms of various channels, domestic debt fell 31.3% month on month in January, up 12.5% year on year; Asset securitization decreased by 27.2% month on month and 63.1% year on year. There was a breakthrough in overseas debt. In January, a total of 7.8 billion yuan was raised (except for Huaxia Happiness's debt restructuring data), with a month on month growth of more than 32 times, showing obvious signs of recovery.
2、 Real estate enterprises: the list of private enterprises issuing bonds has expanded again, and the issuance of overseas bonds has increased sharply
From the perspective of financing real estate enterprises through various channels, this month has two major characteristics: 1. In addition to the head private housing enterprises, the private enterprise debt issuance force has expanded again; 2. State owned enterprises paid the bills, and overseas bond issuance increased sharply.
First of all, as the decision-makers emphasized that state-owned enterprises, private enterprises and mixed ownership enterprises should be treated equally, no threshold should be set on the access conditions, and the financing of private real estate enterprises is not smooth. Previously, private real estate enterprises were not favored by the capital market because of their high risk conductivity and lack of financing planning. In recent months, the gradual recovery of private enterprise financing has only focused on high-quality private enterprises. New Hope Real Estate, Zhongjun Group, Yajule and Hejing Holdings all successfully issued bonds this month, which shows that after a year of dynamic adjustment and policy stimulus at the end of the year, the credit repair of the bond market is gradually in place. For real estate enterprises that are still capable of self rescue and steady operation, their reasonable financing needs will also be met.
Secondly, the overseas bond market has improved. Recently, the overseas debt restructuring process of many real estate enterprises has witnessed new development. In addition, the expansion of "domestic guarantee and foreign loan" has further boosted the credit of domestic real estate enterprises and promoted overseas investors to restore investment confidence. From the data in January, in addition to Yuexiu Real Estate and China Jinmao, two state-owned real estate enterprises, successfully issued overseas bonds, Wanda Commerce, as the representative of private enterprises, also issued $400 million of bonds. While successfully issuing US dollar bonds, Wanda Commercial Management is expected to welcome IPO in Hong Kong in the second quarter, which indicates that the successful transformation and various advantages of commercial real estate in the short term have contributed to investors' support for Wanda Commercial Management.
3、 Debt pressure: In March and April, the debt repayment peak came, and real estate enterprises still have three hidden worries about debt repayment
From the perspective of the recovery of the financing scale and channels of real estate enterprises, the industry financing has entered the repair channel with steady growth. However, from the perspective of the actual pressure of matured debt faced by real estate enterprises, March and April will first usher in two peaks, with 67.72 billion yuan and 83.19 billion yuan to be repaid respectively. In combination with the recent real estate market situation, Focus Research Institute believes that real estate enterprises still face several hidden worries:
1. The sales side has not improved significantly, and ensuring liquidity safety is still the top priority.
From the sales data disclosed by real estate enterprises, affected by the Spring Festival holiday and other factors, the sales amount of real estate enterprises in January generally declined year-on-year. Although local cities continued to relax purchase restrictions after the liberalization of the epidemic, the overall enthusiasm of real estate enterprises was not high. The land auction market is still supported by urban investment, so although the industry may be in the end of deep adjustment, it still needs to wait for obvious repair on the sales side. In this process, real estate enterprises still need strategic concentration and judgment to operate steadily and control cash flow.
2. The overseas debt is dominated by US dollar debt, and the depreciation of the RMB against the US dollar will cause the real estate enterprises to suffer net exchange losses.
According to the current data, the overseas debt of real estate enterprises due from March to December 2023 is about 262.5 billion yuan, most of which is denominated in dollars. However, due to the continuous depreciation of the exchange rate of RMB against the US dollar during the duration of the bonds, the real estate enterprises may pay more costs when repaying.
3. Whether it is the relevant policies to guarantee financing or stimulate the demand side, they all need a certain time to produce results.
At present, the financing situation of high-quality real estate enterprises has improved, but the overall industry financing has not yet fully recovered. A considerable number of real estate enterprises still need to "cultivate internal skills" and continue to wait for financing opportunities. At present, the property market is still in the stage of spot recovery, and demand in some regions has improved, but overall, the market demand and purchasing power are still insufficient. Therefore, some real estate enterprises still need to expect sustained policy stimulus.
